How Can the Government Create Jobs While Simultaneously Getting Smaller?
There are people out there who, in my opinion, are talking out of both sides of their mouths when it comes to jobs and unemployment. It seems to be the same contingent that wants smaller government who are also upset (with our government) for not doing more to spur job growth. For the life of me I cannot understand this argument. To be honest, it feels to me like they are angry for the sake of being angry.
Our unemployment rate is just under 8% which, by most standards, is still higher than it needs to be and “unacceptable” for an economic recovery. But to what are we comparing it? Historical norms? Unemployment averages more than 11% in Europe today. “But where are the jobs!??!” I heard someone angrily shout on CNBC yesterday – whose responsibility is it to provide jobs to folks who need them? Seriously, that is my question. Is that the government’s job? If that’s the case, how can they create jobs (think improvements to roads, bridges, tunnels, etc.) but shrink in size simultaneously?
“The government needs to get out of the way of private enterprise so we can go about our business.”
How is the government in anybody’s way? I started a new business last year in the State generally regarded as the most onerous to do so. I have had literally no interference from the big bad wolf that is Uncle Sam. In fact, I was shocked at how inexpensive and smooth most of the process was. Some of it was time consuming, but it was all understandable and reasonable.
“But what about the increase in payroll taxes and healthcare costs??”
This is a legitimate ‘complaint,’ if you want to call it that, but only because payroll taxes and healthcare costs have technically gone up. Is this really the government’s fault? Should the costs of such things always go down over time? Should things just get easier and easier with no potential risks or drawbacks? Whose job is it to ensure that is the case? Is that the government’s job? But I thought we wanted them to be smaller….?
“Our fiscal policy is going to get us in trouble.”
The above statement applies to the money printing and artificial reduction in interest rates (Quantitative Easing) our Federal Reserve has implemented for the past four years. In my view, this has been a very positive example of government “getting in the way,” which has afforded millions of Americans the ability to refinance both residential and commercial mortgages and for companies to reduce their cost of capital. Private companies have more free cash flow as a result of the policy and record cash hoards – it is up to THEM to decide how to invest it (hiring, spending, research and development, mergers and acquisitions, etc.). Balance sheets in the private sector look better than ever, and if companies still aren’t hiring people….
The Department of Redundancy Department
Companies have become more profitable since the Great Recession, on a per share basis, by laying people off in droves and then realizing they are actually better off without them. In Europe they call lay-offs “redundancies” and this term can be taken quite literally. If you are not a necessary commodity by your employer’s standards, you may be considered redundant. Does this sound cold, calculated, and even shrewd? Consider a segment on ’60 Minutes’ a couple weeks ago that explores the increasing role computers and robots are playing in our work force.
So what are we really angry about? Are we angry that things haven’t turned out the way we thought they “should?” Probably. Are we scared that our future generations may not have it as good as we did/do? For sure. Are we upset that we just may not have anybody to blame, or even worse that we ourselves may be at fault in some way? That’s my guess.
I think it’s time to quit playing the blame game. It’s boring. It’s time to get back up. It’s time we as a nation made the decision to be great again. Maybe Sylvester Stallone was right….
Maybe….? Let’s stop complaining and get back to what’s important.
Have a great weekend!
Adam B. Scott
Argyle Capital Partners, LLC
10100 Santa Monica Blvd, #300
Los Angeles, CA 90067